Allister Sparks

A harsh winter of discontent lies ahead

2015-03-25 09:00

Allister Sparks

As the days grow shorter we should brace ourselves for the toughest winter since the birth of our democracy. Those cold winter months have become the traditional time for the trade unions to launch the country into a series of wage negotiations. Last year their excessive demands, which culminated in a devastating five-month strike in the platinum mining sector, brought our economy to the cliff's edge.

This year the three sovereign rating agencies have warned that if the same happens again, we shall go over that edge. We shall end up at the bottom of the cliff with junk status ratings.

We don't want to go there, because junk means junk. It will become nigh impossible to attract investment capital, which will send our already appalling unemployment rate soaring and could even lead to the government defaulting on social welfare payments.

That would be the road to social unrest.

The big question is whether the government can hold the line on wage demands? Finance Minister Nhlanhla Nene drew that line pretty clearly in his budget speech last month. Wage increases in the public sector, he said, would have to be kept below 6.6%. Since then the state has lowered the bar another 1%. But the public sector unions are opening their demands at 15%.

Aware of the consequences

There can  be no doubt that Nene is fully aware of the consequences of failing to hold that line, or of a series of prolonged strikes resulting from the state's determination to do so. The rating agencies have told him in no uncertain terms. But Nene is a newly appointed Minister with little in the way of a constituency of his own in the ruling African National Congress.

He will need backing, particularly from the president. But I have difficulty picturing Jacob Zuma going to war with the trade unions in the role of a local Margaret Thatcher.

What about support from Nene's predecessor, Pravin Gordhan, and Deputy President Cyril Ramaphosa? Ja, well, maybe. Both understand the critical importance of holding that line, but they, too, are short of personal backing in the ANC.

So the main hope lies within the unions themselves. Do they realise that if our economy goes over that cliff-edge, they will end up with the rest of us in the junk-heap at the bottom? Hopefully yes.

The union leaders are not foolish people and they, too, learnt a bitter lesson from last winter's industrial warfare. That five-month strike was not fun for the platinum workers and their families. They lost far more money than the increases they got at the end of it.

Even when the strike ended the job losses continued. The workers returned to find the mining sector shrunken as a result of closed shafts and mechanisation.

Moreover, the warfare became internecine and has shattered the union movement. The once-powerful Congress of South African Trade Unions is a shadow of its former self, reduced to an association of public sector unions.

A personal fight

The private sector unions have broken away, following the National Union of Metalworkers of South Africa, the country's biggest union, which wants to form a Socialist Workers Front and maybe a left-wing political party beyond that.

In the midst of all this fragmentation looms the lone and seemingly confused figure of the one trade union figure of any major significance - Zwelinzima Vavi. His personal fight with Cosatu president Sduma Dlamini has been the most debilitating of all. Vavi still has a significant personal following within the labour movement, but at the moment he appears to have nowhere to go.

Dlamini wants to be rid of him, but doesn't want to make him a martyr by firing him. So he is trying to have Vavi dismissed on what must strike any objective observer as spurious grounds. For his part, Vavi wants out but doesn't want to be seen abandoning a movement he has spent his life building into a formidable organisation. He would rather be fired than quit.

How this stalemate eventually plays itself out remains to be seen, but one thing is clear - the longer it remains unresolved, the longer Vavi hangs there in limbo, the more his status will decline. He is still potentially a valuable political asset, but a rapidly diminishing one.

What all this adds up to is that the ruling tripartite alliance is not what it used to be. Cosatu, which only 15 months ago at the ANC's Mangaung conference still had a power of veto over ANC policy decisions it did not like, no longer has that power.

Vavi sought to exercise that veto when, on the sidelines of the Mangaung conference, he declared that if the ANC were to adopt the National Development Programme as part of its political platform at the March 2014 general election, Cosatu would have "great difficulty" campaigning for it.

As it turned out, Zuma did include the NDP in the ANC's election platform - sort of - and Cosatu sort-of participated in the campaign. But breakaway Numsa pointedly did not. By then the civil war within Cosatu was under way, and Vavi's veto threat was only partly successful.

But today I reckon that veto power is no longer there. What is left of Cosatu belongs to Dlamini, and Dlamain is Zuma's man. Has been all along in his efforts to get rid of Vavi.

A Catch 22 situation

That means the Cosatu tail can no longer wag the tripartite dog as it once could. It is on its way to becoming what Vavi always warned it would under Dlamini - a labour desk in Luthuli House.

This has implications when it comes to assessing what may happen in the bitter winter of wage negotiations that lies ahead. Zuma will have less reason to worry about the constraining effect Cosatu may exercise on the state's efforts to drive hard bargains with the public service unions and keep the settlements within that 5,6% line.

The state will, of course, have to take care not to drive the unions into strike mode, for that will cause the rating agencies to act every bit as negatively as breaching the line would. A Catch 22 situation.

But it is not only our economic crisis that is at play in this upcoming drama. As I have noted repeatedly, we have a political crisis coinciding with our economic crisis and the two are interacting.

The political crisis is that the ANC, and Zuma in particular, are fearful of the rapid growth of the Economic Freedom Fighters . Julius Malema's populist exploitation of the Nkandla scandal, together with the yawning wealth gap, has them in a panic. For the government to be seen getting really tough with the unions in the run-up to next year's local government elections would play right into Malema's hands.

But then so would a downgrading to junk status, with its inevitable impact on unemployment and poverty.

The way out of this cul de sac has been indicated by many analysts. It is to unleash the shackles and enable the private sector to do what it does best, which is to generate the growth, the jobs and the taxable revenue that this country so desperately needs. But don't hold your breath waiting for Zuma to do that.


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